Consumer spending and personal income were UP in October according to new government report

December 1, 2022

Americans were spending in October and personal incomes also increased even with inflation.

That’s according to a new government report released today. Before you start commenting…”that’s not true!” Let me explain what the report says about where people are getting all this money.

The report I’m talking about is the October consumer spending report from the Bureau of Economic Analysis.

The Commerce Department found inflation is starting to ease. But even with really high inflation, American consumers spent 0.8% more in October than they did in September. What were we spending on? Cars, furniture, dining out at restaurants…plus we were also spending on services trying to catch up on travel and experiences we missed out on during the pandemic. Next month’s report will likely be really strong too after a record breaking shopping spree during November’s Black Friday and Cyber Monday sales.

The report also found personal income increased by 0.7% in October. That income came from wage increases and government social benefits – like the stimulus in California. And even if you account for October inflation numbers – that still leaves Americans with 0.4% more income in October than they had in September.

So, where are people getting all this money? The report found, Americans have been dipping into their savings and spending on credit cards to pay for all this spending. The saving rate dropped to 2.3%. That’s the lowest since July 2005. Now, understand this may not be your personal experience, these numbers are an average for all Americans.

Read the report from the Bureau of Economic Analysis here.